on italian luxury. carmakers expect to spend nine billion dollars on new models. >> tech titans google and apple urged the u.s. government to stop it is spying. japanese economy slows. exclusive interview with the prime minister tells us there is no end to abenomics. good morning, everybody. i am guy johnson.

>> i'm francine lacqua. let's get straight to the top corporate story. fiat is planning a $9 billion investment in new models. >> it is part of their turnaround strategy to end losses in europe and revise its italian factories. jonathan ferro joins us now with the details. big money, big focus on the romeo. marks like alfa >> it is not just about upscale and luxury, it is about the cars and fiat that are actually selling, the 500, the alfa romeo that has mass is potential at the luxury end of things and the maserati as well. u.s. selling more in the than anywhere else. it is about made in italy and it looks like it is going to be about sold in the united states. has beent in europe doing so badly and they have had to cut jobs within italy itself heard good news because they're actually leveraging the luxury

branding that goes with the identity of italy. that is where these cars are going to be, at the high-end. let's be honest, the 500 is not the lecture end. it is considered cool and premium. they're going to leverage that. >> definitely cool. the ceo is considered the enfant terrible of carmakers. is making these high-end cars stylish to sell in the united states and then europe. >> would cars to make? you make the cars of the higher margins and absorb the higher costs. you look at maserati and offer a mayor, these generate those margins. >> he of the channel, you can push his car soothe them. what is interesting about this has long been

seen as the high-end. maybe with chrysler's cash flow, actually, sergio can make this happen. >> there's a big u.s. element to the story. you're now looking at half revenue coming out of the u.s.. lesser land and what is going on in europe. as a distribution network and united states. they can leverage and use some of the european luxury. it is all about european luxury that americans are buying. >> john, thank you so much. >> let's move onto to get some other company news. that's go to a banking story now. attention in major sale at hsbc or a spinoff. according to major reports they may sell a stake in their retail and commercial banking a public offering. caroline hyde joins us now with the details.

caroline, how much is this going to be worth? >> you're right, up to 20 billion pounds. there are talks in "the financial times" that it could be sold at 30% stake. ages bc talking to investors and discussing it in formally at the board level. hsbc talking to investors. mentioned is all about the university academic john vickers. he has given overall recommendations why the independent commission on banking should separate their investment banking units from the retail banking units, from the areas where you offer deposits to consumers, we offer small business loans. that should be separated off

third it is all part of making the banking system safer. but is it too arduous? certainly the chairman of hsbc says there being made uncompetitive. they are having too much capital set aside. putting a tougher chance versus their global competitors. there are groups coming from ages bc that they might leave the united kingdom altogether in terms of headquarters. that seems to be off the agenda. what is on the agenda is making ,his ring fencing issue spinoff getting the unit independent from the investment banking unit and could spark a bit of a trend. in terms of share sales, they're certainly a trend there. look at what we have had this year. in0 ipos, 20% we have seen terms of banks, 57 billion dollars raised by banks this year. that is up 15%.

we could see yet furthermore next year. this year we had laureates in december and deutsche back in april. -- this year we had lloyd's in december. there could be a flurry of initial share sales from the likes of hsbc next year. >> caroline hyde our european business correspondent. tech giants calling on president obama. what are these companies looking for? >> they're looking for the us government to curtail its electronic surveillance program. eight of the biggest tech companies have signed an open letter to president obama and congress that will go in the papers today. they're done things like this

before. the fed open letters and what is different now is there more angry than they have been in the past. they're also more specific in terms of what they would like the government to do. one thing they would like to see is some kind of limit on the authority of the government to also collect data. ceo of google, larry page, says we're doing our utmost to up our game in terms of asryption at google and even we do that we apparently learn that the government is wholesale taking this data off our servers, undermining our ability to provide our users with more secrecy. what is talking about is the nsa program called muscular at the world learned about at the end of october. as we learned that as of january of this year basically the nsa was taking data from both google, yahoo! and their internal servers, millions of records and data as well as metadata.

would like for one and into that program. talk to me about what we are talking about here. to data collection is not as it sounds. is. the concern >> the way it was working in the past that we all knew about, thanks to snowden, i guess, was that the u.s. government, the nsa would go to these tech companies and say we would like information about -- we would like access to e-mails and data s of yours heard there provider that end would be quite restricted about what they could disclose to the client or to the general public about what they were sharing with the government. that program was called prism. there were a lot of objections to the prism program.

they got court last approval to go about this. what irked them is muscular and in addition to that. at only were tech companies expected under the cloak of secrecy to provide this information to the nsa through this front door fashion, as i was happening behind their backs the nsa was already taking all this information from them anyway but after servers. they say in their letter that we understand the government has a job to do in terms of protecting people and needs to access some information, they just don't think this is the right way to do it. >> interesting. ryan, thank you so much for that. we will be spending much more time talking about this very it we will also talk about the situation in the ukraine. hundreds of thousand of people taking to the streets of kiev as a measure of the president. offor yanukovych backed

trade in europe. angela merkel keeping pretty close eye on this. how does it look from your neck of the woods? >> one is interest from the german president. this is a picture of the front page of "devout." the pictures on the front page of many german newspapers and what has been happening with the protest. this is the lenin statue that was whole down. we have some pictures of that as well. it was pulled down and decapitated. mrs. merkel will be concerned from the point of view of the ukraine, but also the point of view as eu relations, .erman relations there is going to be some protest regarding the winter

olympics. >> david, economically the situation in the ukraine is not looking -- is looking pretty difficult. are they facing a default? >> that is according to the prime minister. on saturday was saying the country needs $10 billion in order to avoid a default which might explain why we saw president yanukovych traveling outside the ukraine last week. he spent three days in china. then he went to visit vladimir andn in sochi in russia that gave rise to the speculation that he is preparing to sign some sort of agreement. that has been denied from the russian side, also from the ukraine side. that is certainly what is keeping these -- keeping the flames of these protest going over the weekend. >> our european editor david tweed on the latest from the

ukraine in berlin. >> a similar theme running through. antigovernment protest began converging on government housing in bangkok -- the government house in bangkok. >> china's trade surplus widened last month to nearly 34 billion dollars. that is the largest in more than four years. exports topped estimates and rose more than 12% from a year earlier. >> japan's growth slowed more than estimated. in an exclusive interview, he can kickstartll the economy. end to abenomics. at the beginning of next year the cabinet will prove the related policies on the growth strategy third we will announce .he timing of their execution

focus onl continue to japan as tensions mount between the world's second and third biggest economies. we will speak to long time china about the two nations economic relations next.

>> let's continue the

conversation now on japan. its economy slowed more than estimated in the third quarter. that underscored headwinds to prime minister obvious from recovery drive. >> tensions mount was china over regional security. he said his door is always open to china. because there are issues all the more i think there is a need to have a meeting by the heads of state. i always keep my door open for dialogue and i hope china will adopt the same stance. that is my hope. >> joining us now from hong kong to discuss this is the chief managing director at asia analytical. great to have you in the program. talk to us a little about what you hope will be achieved with the two nations coming together. political tensions have been rising. last thursday and friday we a fewthey have come down

notches. as i correct e >> relations between japan and china have always been fraught. chinese people have never forgotten, even though it is more than 60 years ago, what happened during the second world war. this is very important because the long memory, the bitter memories that are in china could be triggered very quickly whenever there is anything involving japan. that is why the situation is so tricky. is not just two countries trying to sit down and discuss a territorial dispute. there's all this boiling in the background. onfact, only yesterday phoenix tv, china television station, they had chinese people is beingbout why japan so unreasonable. there was a lot of emotion to this. constrains the leadership, both on the china

side and the japanese side. so i'm sitting down and making rational decisions. you've got to take into account a lot of emotions that are boring away. >> pauline, are they being pragmatic when he calls for some of you to diffuse the situation? the chinaands represents a major export market for his country. he is simply just looking at the political's situation and saying he can't do this. china is a big art of that. >> it is a little more complicated than that. to start with, i think he's very astute to make the first move. he comes across as unreasonable, unwilling to talk. not is up to you, the ball is in your court, are you willing to

talk to us, are you willing to be reasonable? i think he has got some points there. .he economy is important china is an important export market. but i think that at this point neither government believe seriously that this will thatate to anything remotely involves military conflict. for one thing, china doesn't how willreal -- >> this be perceived by beijing? will it be perceived as appeasement? how will they be looking at the announcement from out they? to what extent are the chinese authorities making more out of this because they're worried about their own economic backdrop? i think for the leadership the reaction is probably good

business where we want them to be. they're coming to us. there is also the psychology that japan should be paying for all the bad things that he did to china during the war. it has been playing this card, the skilled card for a long time. -- maybe wee edge could get more in the terms of concessions from them. from the leadership point of view, yes, this would be seen as japan making the first move, not necessarily giving him but being the weaker party in the dispute. >> yes, it is a sign as you point out in your notes, that japan is the reconciliatory party in this. however, we are expect impossibly more chinese disruption to japanese imports, right? there was a report by cctv over

in china about carmakers and regulation over there. how much is japan going to suffer if no summit is insight? if you read the blogs, the , the tv people talking about how they are reacting to this japanese stuff, i think at the public level, people buy japanese goods, the reaction is not that strong yet. but whitney to happen for that to be a boycott like it was last year is if there was a more serious disagreement, where the japanese make a move that might be seen as provocative. if there was a visit to a shrine or another fishing boat getting entangled in the coast guard

incident. short of that i think it is still going to be quite smooth sailing because japan has see in to have offered a conciliatory hand and said look, we're are willing to talk. from the point of view of a boycott of japanese goods, i don't think it is at the point yet where it was like yeah last year.- it was like last don't forget, laster there was pressure. up.auline, let's wrap it sorry. we're beginning to run out of time. it is interesting to hear what you have to say. joining us from asia analytical. $100,600 is what a jumpsuit being soldce lee is

for. it is the outfit that he were during the filming of game of death.

>> welcome back. here's what is happening with the markets. manage chronic come over to you. >> we know that china is exporting, we know that german export orders came in stronger than the markets had thought. the general sentiment is of course that these markets are still under owned.

ecb stillck for the has the potential for negative interest rates heard the ability to deliver liquidity and asset purchases in very extreme scenarios. that is quite the visual rhetoric. you can see the euro-dollar trading higher. do with thee to german data coming through. later on you will get three federal reserve's interest. three of them quite hawkish. the chicagoer is fed. higheres a little bit than the s&p virtually flat. 1806. as all the tapering pricing? an optimistic view. thank you. >> manus cranny with the market report. pulse",p with "the

america calling for surveillance reform. >> we will be back in a few minutes time. ♪

>> good morning, everybody. welcome back good you are watching "the pulse." i'm guy johnson. let me walk you through the bloomberg top headlines. angry protesters in the ukraine have torn down a statue of lenin and demanded a new government. they want to keep up the pressure the president who has rejected close ties with the european union. speculation that the president will sign up for a russian led trade bloc has cost hundreds of thousands to pour onto the streets again this weekend. japan's growth slowed more than initially estimated in the third

quarter. business spending contribute to the downward trending gdp. in a sweep of interviews, they told us he wanted companies to increase wages faster than inflation. china's surplus widened last month to $34 billion. that is the largest number in more than four years. exports topped estimates and rose more than 12% from a year earlier. meanwhile weaker than projected inflation and prospects of a fourth-quarter slowdown suggest economy remains vulnerable. let's carry on talking about trade. francine come over to you. >> it is been 18 years in the making and wto has unveiled a global deal that could add a trillion dollars to the world economy. ryan chilcote has more. ryan, this has been a long time in the making. often, the wto thinks we don't have an agreement. this time, it is not the biggest agreement, but it is an

agreement. >> a takeaway year here is that the wto seems to -- the take -- ahere is that the wto lot of talk now is about regional trade pacts. your the transpacific art and a ship that is being negotiated between united states and asian countries. in fact, many of the negotiators that were at the wto meeting in bali went from there to singapore. the problem is structurally you have 159 countries it and have to get on the same page. we saw with this even on saturday, the u.s. and cuba holding the whole deal hostage. saying unless other countries force or opposition to the u.s. is embargoed cuba, they're not going to go along with the deal heard in the and they dropped that issue. but it almost carried this on for weeks more. best -- not said it an exaggeration to say that this

effectively saved the wto. >> what are the implications echo what is it mean for corporations around the world? what does it mean for corporations around the world? >> redtape and bureaucracy of it iss and the oecd says responsible for summer between two and 15% of the cost of goods. it is a big deal. they could have lowered those cash levies at borders. they will leave that for later. will bey those talks reinvigorated. now it is about cutting the redtape, particularly in third world countries where they are not so prepared to deal with customs and a quick way. often there is reason for that because you're looking for a backend. in any way, the national chamber of commerce says by increasing the efficiency of customs, the cost of shipping should go down

by 10%. very excited about this. the global economy is estimated at around $65 trillion. the thinking is that if this could add another trillion. it is an uptick of a couple percentage points. >> it is something. ryan, thank you so much. >> thank you very much, indeed. this change direction a little. as we end -- as we head to the end of 2013 let's discuss entrepreneurship and the united kingdom. 500,000 new businesses have been added by the end of the year. it is a great place for start up to start. joining us now to discuss this is michael heyman. he is a cofounder of start up britain.- of start up we're talking about amazing developments that we are seeing in the tech story here in london and around the country. there is sometimes a tendency to think about startups and draw

lines straight to technology. is important but we need to think more broadly than that. >> i think without a doubt that startups and technology are intimately linked. tech is one of the absolute standardbearers, one of the hot topics in terms of taking the u.k. start up seen fourth. a half a million number is a business every minute. every sector you can think about. .ech is a proven winner that is driving an awful lot of start up activity. >> is a crowding out others? is a danger that we see that and crowd out others? >> everything so great i think technology is so ubiquitous and across the many things, historic sectors like advanced goingcturing have so much on. there's no doubt about it. technology is driving a huge amount of progress right now.

jobs in london have come out of the tech sector. 90,000 brilliant firms that are driving it. i think we should be championing the fact that tech is a big heart of the story about why britain is back in business now. they might have an argument with that. >> neil from the outside, what more can we be doing? what more can we be doing to help? started start up britain, it was about the same time ms. tech city. tech city is this country's most important technology clusters and in fact one of the world's most important technology clusters. the fact that the government and private sector can work together

, if you look at media city and manchester and every other big city, tech city has provided a blueprint by which these clusters of businesses can come together. the most important thing is atop the story up in terms of how successful tech city has been to this country. there are so many other things that can be done. the doubling of the start up an important part of backing a proven winner which is small business. >> one of the things i've yet to truly feel is the link from a geographical point of view between what is a hundred meters down the road that way and what is a hundred meters up the road that weight. we saw the technology boom collapse in 2000, what that did was act as a kickstart her for what was a huge evolution of the tech scene.

with having a similar thing in financial services. it is get these two -- starting but you sense that we are in the foothills of what could be an amazing relationship. is not to think of them as monolithic blocks. there is a hold new sector called fin tech. is part of that scene working together. capital tends to follow those businesses, whether it is in flotation or lending. the city is interested in some of the star players that are emerging. many of those businesses tend to be businesses that are technology oriented. -- we significant is it have had this new market created by the lse. nobody gets a list on it.

part of that is the timing. -- doing a seen more champions that we can coalesce around? >> yes, i think so. published its report on a thousand companies that will inspire britain in the last week. how doesquestion is accelerate? over the last couple of years the stock market has proven to be a tricky move for some businesses. now is the economy comes back, many will start to look at the stock market -- >> should rethink of london as a start up seen or a scale up seen? >> both. if this is going to be the next 12 months of great, it will be scaling them up to be world beaters. from seven hills

which i've just learned is actually named after sheffield and not rome. let's go from start up to swiss banks. francine come over to you. >> the u.s. is clamping down on offshore tax evasion. asked buts are being on regulars to participate in a program with american authorities. manus cranny's here at the latest on the story. is this the end of swiss banking secrecy as we know it? >> definitely a turning point. the french and the u.k. all depended on the whistleblower case. with the u.s. goes up in legal battering ram you can be pretty sure the rest will follow. wars on the cards as a department of justice saying listen, you can have a waiver, you can have an exemption, you have to sign up. the regulator and switzerland is saying get on board, get over

yourselves. there are 300 banks enough to make the decision with the to join in on a voluntary program with the disclose information or indeed run the risk of quite significant fines and prosecution. >> that is a concern. if you don't sign up now voluntarily, further down the line they could have huge fines. be excluded from doing business in the usa. that is a critical part of the story. >> thank you, manus cranny. brazil's regulators have been cracking down on some big names. one is one of the biggest shareholders. he will explain why he wants the company's brazilian unit to state what. state put.

>> good morning, everybody. you are watching "the pulse." you are alive -- we're live from bloomberg's london headquarters. brazil's antitrust regulators have been cracking down on a handful of country -- handful of companies controlling the market. is ourpbell correspondent. we're trying to align what is happening between telecom italia and the telecom company in brazil. >> is not too complicated. telefonica which is not a major shareholder in telecom italia

owns two large brazilian telecom operators. own, as well as telecom italia's brazilian operation. brazilian regulator has looked at the situation and said any market where we have four full service mobile carriers, we have this one spanish company that effectively controls two of them. that is not ok because that is not real competition. therefore, there seem to telefonica you either have to find a partner for your own assets or make sure the telecom italia, which you control, sells its brazilian asset. that is a bit tricky on both sides because telefonica does one sell its own asset and we have shareholders in telephone to tell you saying they don't want to sell the crown jewels. it is quite a tricky not they ite to find a way to unpick it is quitericky -- they have to find

a way to unpick. the question becomes this a brazilian regulator one to allow only three players as opposed to four? in a big country maybe they don't. the other question is could we have someone else come in, another foreign carrier to buy t i m brazil which is worth at there's abillion. long list of people that want to find their way into brazil they can. >> thanks for that. matt campbell toeing is on the situation in brazil. let's get an angle on this, and italian angle. this fromet more on the major shareholder of telecom italia. he's opposed to the company's sale of the brazilian unit.

he joins us from milan to explain why. >> good morning. is a conflictat isinterest in this board -- interest. -- we wills has been be revoking the board which is an important passage of element to talk about brazil. this board will be free if we -- of this asset

which we believe will be essential for the future of telecom italia. me through. you want to overturn the board one of your main gripes is the sale of this brazilian unit. what chance you have of overturning the telecom italia and board on december 20? that things have changed last month because telecom argentina has been forced to sell and also there is a convertible bond that has been done. some authorities here in italy are investigating. even iss isthat recommending the funds vote against these boards and provoke this ward. everyday passing

by better and better. >> how might you think you have in terms of votes at the moment? you're talking about some big investors and funds backing your so-called riots. ef 20% of the votes right now? just give us an idea of how many votes you can muster on your side? >> we didn't raise votes in this, we just educated that parties of the financial situation. regarding what is going on. we will see this assembly on the 20th. what kind of votes against and revoke this vote. i can't tell you actually. we can pass on the brazilian asset docs if you want. >> what is your backup plan for the brazilian asset of telecom

italia? shareholderswe as proposed in 2010 a merge between and oi.azil we do know what kind of synergies are in place in the case of a merger. that a standalone t i m brazil would have a nice growth path for the next three years, i would say. then ultimately we will see what will be the best outcome for tam brazil. the worstthis is moment to sell t i m brazil. the reason why i am saying that is because the sacrifice we are doing on the margins is because of gaining participation in the market traded has been shown

detrimental to telefonica and some other players that we're gaining shares in the market. right now would not be the proper time to sell it in brazil anyway. on a standalone basis. >> i'm so sorry, we will have to leave it there. we will interview you after that. now coming up on "the pulse," pers households keep getting hit by soaring energy bills. is there more sticker shock to come or will the new year see a price change? we're looking at the outlook for

2014. we come back. -- we will continue when we come back. ♪

back. how much will the sector need to restructure to attract new investors. joined by chris rogers.

energy and the economy is a heady combination. 2014 is going to be a very interesting year. river german start developing -- we have a german story developing. i think the issues for 2014 across the u.k., across germany and across france are all going to be about the politics. when we did our research for 2014 we found that it was all about southern europe, northern europe this time around. analysts don't have a great outlook. say 35us estimates billion of earnings next year. that is 10% rivalry -- it is 10% below where we were last year. greg cesar long-term infrastructure projects.

>> we have had the energy bill that has been put through that is taken years to develop. -- that has taken years to develop. what we have seen from the labour party, they want to change everything. >> we need to understand the political landscape. , chris rogers. >> for those listing on bloomberg radio, the second hour of "the pulse" is coming up. we have an exclusive interview with the prime minister of japan , shinzo abe. is it the end to swiss bank secrecy? we talked to the principal associate about tax evasion. you can follow guy and me on

twitter. we will see you in just a couple of minutes. ♪ :

$12 billion pending to boost brands. mind.u.s. buyers in >> tech titans team up. others urge e and the u.s. government to stop data spying. >> an exclusive interview with t prime minister of japan. >> good morning to all of you in to thosed good evening in asia and those